BME Business Performance 4Q and FY 2014

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February 2015

Business Evolution January – December 2014

Business Performance

Fourth quarter andFY/2014

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February 2015


DisclaimerThis presentation, which is personal to the recipient, has been prepared and produced by Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas Financieros, S,A, (“BME”) solely for the benefit of investment analysis and may not be used for any purpose other than assessment of investments concerning BME, Unless otherwise stated, BME is the source for all data contained in this presentation, Such data is provided as at the date of this presentation and is subject to change without notice,

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The information in this presentation has not been independently verified, No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information or opinions contained herein, None of BME, any of its shareholders, or any of their respective subsidiary undertakings or affiliates or any of such person’s directors, officers or employees, advisers or other representatives, accepts any liability whatsoever (whether in negligence or otherwise) arising, directly or indirectly, from the use of this presentation or otherwise arising in connection therewith,

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February 2015


Index

A. Results

B. Business Overview

C. Financials

D. Business Drivers

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February 2015


Index

A. Results


C. Financials

D. Business Drivers

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February 2015


Results

Net profit

Net profit increase of 12.4% compared to 4Q13

+12.4% (€ Million)

38.0

42.2 41.538.5

42.7

4Q13 1Q14 2Q14 3Q14 4Q14

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February 2015


Results

Net profit

Net profit increase of 15.2% compared to 2013. Best year result since 2008

+15.2%(€ Million)

150.0 154.2 155.1135.5 143.1

164.9

2009 2010 2011 2012 2013 2014

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February 2015


Solid operating leverage

Costs Revenues Revenues not linked to volumes Ratio

78%

90%

106% 109% 105% 103%112%

118% 114% 112%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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February 2015


Key ratios benchmarking• Efficiency • ROE

- BME´s data as of 31/12/2014

- Average peer Group figures are calculated using last results published and not taking account of goodwill impairment charges

40.9%

17.9%

BME Average PeerGroup

30.2%

47.5%

BME Average PeerGroup

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February 2015


Dividends: Maximizing shareholders´ returns

0.956 0.986

0.40 0.40 0.40 0.40 0.40 0.40

0.60 0.60 0.60 0.60 0.60 0.60

1.016 0.986

0.60 0.60 0.60 0.60 0.650.89

0.372 0.372 0.372 0.372

2007 2008 2009 2010 2011 2012 2013 2014

First Interim Dividend Second Interim Dividend Suplementary Dividend Extraordinary Dividend

1.972 1.972Total Dividends /Share

Pay Out 82% 86%

1.9721.9721.972

89% 86% 86%

1.972

98%

1.65

96%

1.89

96%

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February 2015


Index

A. Results


C. Financials

D. Business Drivers

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February 2015


Business Areas

Consolidated Revenues FY 2014 - %

EBITDA FY 2014- %

Equity46.3%

Settlement, 24.5%

Clearing5.2%

Information 11.2%

Derivatives3.7%

Fixed Income

3.4%

IT & Consulting

5.6%

Equity48.7%

Settlement, 26.4%

Clearing4.0%

Information 12.2%

Derivatives2.9%

Fixed Income 2.7%

IT & Consulting

3.2%

Redefining Business Units

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February 2015


162,343 164,546 158,225

219,407

119,431

190,728226,668

196,596

270,696

165,785

1Q 2Q 3Q 4Q 1Q 2015/2014 (*)

40.846.1

40.8

48.8

71.1

2010 2011 2012 2013 2014

Equity Market

Equity- Turnover (€Mill.)

Path of growth in equity activity

Thousands of € 4Q 2014 4Q 2013 % FY 2014 FY 2013 %

Revenues 42,052 36,857 14.1% 156,548 132,276 18.3%

Expenses (9,170) (10,038) -8.6% (38,113) (38,400) -0.7%

EBITDA 32,882 26,819 22.6% 118,435 93,876 26.2%

Turnover 2013(€ Mill.) Turnover 2014 (€ Mill.)

+ 17%

+ 38%

+ 24%

+ 23%

+ 39%

Equity trades (Mill.)

(*) as of 25 February

+ 46%

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February 2015


14,16418,901

28,514 30,810 30,683

13,780

18,838165

1,292

5,427

2010 2011 2012 2013 2014

New shares issued of listed companies New listings (IPOs)

27,944

37,739

32,10228,679

36,110

• Companies using the market to diversify financing and deleverage

Investment flows channeled to the Exchange (€ Million)• Total of 36,110 million euros in

investment flows channeled to the Exchange (+12.5%).

• Strongest volume in history with 185 capital increase operations (+21.7%),

• Admission of new companies (IPOs) in the amount of 5.4 billion, more than four times the 2013 amount.

• Scrip-dividend amounted to 13.1 billion euros (+24.9%), new record high.

Source: FESE (Federation of European Stock Exchanges)

Equity Market

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February 2015


1,514 1,492 1,480 1,466 1,456

676 710 754 751 722

4Q13 1Q14 2Q14 3Q14 4Q14

2,1782,2172,190 2,2342,20213.8 13.6

12.9 12.4

16.2

4Q13 1Q14 2Q14 3Q14 4Q14

Par Value registered in FI Market value registered in Equity

Securities under custody: Volumes (€ Billion)

Settlement & Registration

Settlement: Number of trades settled(Million of trades)

Revenue Growth in settlement. Work intensification of system reform


Revenues 22,148 19,608 13.0% 82,969 81,437 1.9%

Expenses (6,540) (3,871) 68.9% (18,741) (14,069) 33.2%

EBITDA 15,608 15,737 -0.8% 64,228 67,368 -4.7%

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February 2015


96

107113 112

105

3.9 4.13.5 3.2 3.0

4Q13 1Q14 2Q14 3Q14 4Q14

Subscribers (Thousand) P.Quote (Mill.)

Market Data & Information

Information: Subscribers to primary market sources (Average for the period in thousands of subscribers and millions of accesses per quote)

Positive cycle in market data distribution


Revenues 10,709 8,481 26.3% 37,963 32,994 15.1%

Expenses (2,254) (2,004) 12.5% (8,364) (7,481) 11.8%

EBITDA 8,455 6,477 30.5% 29,599 25,513 16.0%

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February 2015


Volume (Mwh) traded in Energy market (Thousand)

11,14410,364 10,239

5,051

6,473

4Q13 1Q14 2Q14 3Q14 4Q14

314,932

397,583

233,375 237,474 245,613

4Q13 1Q14 2Q14 3Q14 4Q14

Clearing

Mixed performance in revenues. Influence of C&S Spanish reform


Revenues 4,643 4,754 -2.3% 17,703 16,178 9.4%

Expenses (2,526) (1,517) 66.5% (7,997) (5,545) 44.2%

EBITDA 2,117 3,237 -34.6% 9,706 10,633 -8.7%

Turnover BME Clearing REPO (€ Million)

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February 2015


4,5372,354

14,92813,119

8,467 7,491

26,94525,635

4Q13 4Q14 FY13 FY14

1,5252,023

5,579

6,930

5431,029

1,987

3,035

1,5421,840

5,172

7,320

4Q13 4Q14 FY13 FY14

Derivatives

(Thousand of contracts)

IBEX® contracts continue to grow

Stock derivatives contracts tradedIndex derivatives contracts traded

IBEX 35® Futures MiniIBEX 35® Futures IBEX 35® Options Stock Futures Stock Options

(Thousand of contracts)


Revenues 3,349 2,959 13.2% 12,409 11,636 6.6%

Expenses (1,322) (1,176) 12.4% (5,275) (5,539) -4.8%

EBITDA 2,027 1,783 13.7% 7,134 6,097 17.0%

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February 2015


212

304

241

10249

69

76

111

102

115

4Q13 1Q14 2Q14 3Q14 4Q14

164

204

352380

281

Fixed income

Improvement of listing in the market and efficiency in the business unit


Revenues 2,919 2,916 0.1% 11,628 11,959 -2.8%

Expenses (1,373) (1,750) -21.6% (5,168) (5,731) -9.8%

EBITDA 1,546 1,166 32.6% 6,460 6,228 3.7%

AIAF – Turnover (Billion €)

Repo Cash

Balance of MARF (Alternative Fixed Income Market) after first year of activity:

•20 Market Members, 21 registered Advisers and 4 brokers

• 7 issues maturing in 5, 6, 7 and 10 years (€308 million)

• 5 promissory note issue programmes (maximum balance of €420 million)

•1 issue of securitization (€20 million). Open for a maximum amount of €500 million

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February 2015


IT & ConsultingThousands of € 4Q 2014 4Q 2013 % FY 2014 FY 2013 %

Revenues 5,086 3,670 38.6% 18,835 16,976 11.0%

Expenses (2,950) (2,786) 5.9% (11,041) (10,263) 7.6%

EBITDA 2,136 884 141.6% 7,794 6,713 16.1%

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February 2015


Breakdown by business areas

Revenues

Thousands of € 4Q 2014 4Q 2013 % 2014 2013 %

Equity 42,052 36,857 14.1% 156,548 132,276 18.3%

Settlement 22,148 19,608 13.0% 82,969 81,437 1.9%

Clearing 4,643 4,754 -2.3% 17,703 16,178 9.4%

Information 10,709 8,481 26.3% 37,963 32,994 15.1%

Derivatives 3,349 2,959 13.2% 12,409 11,636 6.6%

Consulting & IT 5,086 3,670 38.6% 18,835 16,976 11.0%

Fixed income 2,919 2,916 0.1% 11,628 11,959 -2.8%

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February 2015


Breakdown by business areas

EBITDA

Thousands of € 4Q 2014 4Q 2013 % 2014 2013 %

Equity 32,882 26,819 22.6% 118,435 93,876 26.2%

Settlement 15,608 15,737 -0.8% 64,228 67,368 -4.7%

Clearing 2,117 3,237 -34.6% 9,706 10,633 -8.7%

Information 8,455 6,477 30.5% 29,599 25,513 16.0%

Derivatives 2,027 1,783 13.7% 7,134 6,097 17.0%

Consulting & IT 2,136 884 141.6% 7,794 6,713 16.1%

Fixed income 1,546 1,166 32.6% 6,460 6,228 3.7%

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February 2015


Index

A. Results


C. Financials

D. Business Drivers

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February 2015


Balance sheetas of December, 31th

(Thousands of €)2014 2013

Goodwill 80,619 82,190

Other non-current assets 85,258 82,041

Cash and cash equivalents 205,163 164,254

Current financial assets 84,830 97,158

Non-Group current financial assets 33,400,456 38,400,280

Other current assets 92,190 77,884

Total assets 33,948,516 38,903,807

Owners' Equity 418,931 392,140

External Partners 0 166

Non-current liabilities 18,199 17,534

Current liabilities 33,511,386 38,493,967

Total equity and liabilities 33,948,516 38,903,807

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February 2015


P/L


Revenues 93,438 81,787 14.2% 342,473 307,705 11.3%

Expenses (29,316) (24,770) 18.4% (103,511) (99,205) 4.3%

EBITDA 64,122 57,017 12.5% 238,962 208,500 14.6%

EBIT 62,536 54,862 14.0% 232,566 201,086 15.7%

Financial results (45) 354 -112.7% 1,863 3,265 -42.9%

Share of profit (loss) of associates (465) (266) 74.8% 593 (670) -188.5%

EBT 62,026 54,950 12.9% 235,022 203,681 15.4%

Net Profit 42,695 37,980 12.4% 164,924 143,140 15.2%

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February 2015


EBITDA FY 2014/2013 [€ Mill.] Net Profit FY2014/2013 [€ Mill.]

Comparison with FY 2013

Revenues FY 2014/2013 Costs FY 2014/2013

Margins

[€ Mill.] [€ Mill.]+ 11.3% + 4.3%

+ 14.6% + 15.2%

342.5 307.7

FY 2014 FY 2013

103.5 99.2

FY 2014 FY 2013

239.0 208.5

FY 2014 FY 2013

164.9 143.1

FY 2014 FY 2013

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February 2015


31.4% 30.3% 30.2% 32.2%

4Q14 4Q13 FY14 FY13

46.9% 45.1% 44.5%49.3%

4Q14 4Q13 FY14 FY13

66.9% 67.1% 67.9% 65.4%

4Q14 4Q13 FY14 FY13

Efficiency & ProfitabilityROE Evolution EBIT/Revenues Ratio Evolution

% ROE % EBIT/Revenues

% Cost/EBIT % Efficiency

Cost/EBIT Ratio Evolution Efficiency Ratio Evolution

40.6% 38.5% 40.9%35.9%

4Q14 4Q13 FY14 FY13

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February 2015


Index

A. Results


C. Financials

D. Business Drivers

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February 2015


Business drivers: Highly liquid market • Spanish blue-chips are the most liquid stocks in the EMU

Source: Bloomberg 1) As of 31/12/14

RKFY14

Company Daily avg. FY14

Turnover (€ Biilion)RK

Relative weight at EuroStoxx50 (%)1)

Turnover (€ Biilion)

163.6

138.1

129.4

123.1

116.6

100.3

100.1

92.1

92.0

89.7

63.9

63.6

53.6

0.64

0.55

0.51

0.49

0.46

0.40

0.39

0.36

0.36

0.36

0.25

0.25

0.21

4.460%

1.660%

2.720%

1.560%

2.470%

2.650%

6.220%

2.770%

4.640%

3.330%

0.900%

1.470%

1.180%

1

2

3

4

5

6

7

8

9

10

20

21

27

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February 2015


Business drivers: Highly liquid market • Quality of spreads and best market impact for Spanish stocks

Avg. Spread (%)Avg. Spread (%)

0.359%

0.304%

0.290%

0.275%

0.271%

0.273%

0.249%

0.304%

0.322%

0.289%

0.345%

0.340%

0.326%

0.068%

0.066%

0.068%

0.064%

0.062%

0.061%

0.058%

0.059%

0.062%

0.056%

0.061%

0.055%

0.059%

201312

201401

201402

201403

201404

201405

201406

201407

201408

201409

201410

201411

201412

Avg. Spread (%)

1.037%

1.010%

0.984%

0.927%

0.988%

1.022%

0.960%

1.095%

1.303%

1.102%

1.434%

1.438%

1.283%

• IBEX 35® spread narrowed by 0.9 basis points compared to December 2013.

• Mid-cap stocks have improved their average spread 3.3 basis points, while the spread in small caps widened in the last months with the increase in volatility.

Source: Market annual and monthly reports

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February 2015


• Distribution by markets of business volume of the IBEX 35® companies (2008 – 1H14)

Diversified market

Source: Interim Reports from listed companies obtained from CNMV

Spain EU OCDE Rest

19%

20%

25%

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February 2015


BME: Positive drivers improving the business environment

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February 2015


+ BME

•Deleverage

•Accelerating growth: employment, domestic consumption, Exports

•Reforms

•Low interest rates

•Low CPI

•Expansionary monetary policy

•High liquidity

•Less bank financing

BME: Positive drivers – Macro Scenario

• The scenario macro and ECB measures create a positive circuit channeling savings

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February 2015


0

20

40

60

80

100

1990 1992 1993 1995 1997 1999 2000 2002 2004 2006 2007 2009 2011 2013

Spain Italy Germany

France United Kingdom EE.UU.%

BME: Positive drivers – Structural change in funding

• Market financing (M) vs banking (B) of non financial companies (1990 – 2013)

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February 2015


BME: Diversification and growth• Bet for geographical diversification: technology, regulation and cooperation,

basic pillars for business development

Cooperation: REGIS TR®

Technology: Algeria fixed income

Shareholdings:• Mexico: Mexican Stock Exchange• Colombia: Fixed income

Colombian CCP

Consulting: Peru, Mexico, Chile, Guatemala, Colombia

Technology:

• Infobolsa: Mexico

• SIBE: Rep. Dominicana, El Salvador, Venezuela, Ecuador, Uruguay, Bolivia

• Visual Trader: Chile

• Derivatives: Mexico

• Open Finance

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February 2015


BME: Diversification and growth• Use of installed capacity o as a way to generate value add and revenue

source diversification

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February 2015


Q&A

BME Business Performance 4Q and FY 2014

Economy & Finance

disclaimerthis presentation

relevant persons

persons directors

securities of bme

express instructions

business evolution

financial promotion

financial services